Reason Foundation

New Study: Real Property Inventories for Government

Does your government know what it owns? The answer, according to two new studies released this week, is shocking. Only a third of states have well-functioning systems for inventorying their real property, meaning that many government officials do not have access to the basic financial data necessary to act responsibly. Even the federal government has yet to assemble an accurate and comprehensive inventory of its property. As governments face the largest budget deficits in history, the importance of efficient and effective property management has never been greater.

To help public officials improve their property management capabilities, I (Anthony) co-authored two studies with MAPPS director John Palatiello looking at best practices for real property inventories (RPI) at the federal level, and the state and local level. These studies highlight the need and value of inventory initiatives and provide public officials with a blueprint for a successful system.

In Knowing What State and Local Governments Own, we find that nearly half of all states lack the most fundamental information about what they own, and even those with some form of inventory fail to use the information productively. As a consequence, most states are not compliant with federal RPI mandates, or even their own state laws.

The second study, Knowing What The Federal Government Owns, shows that this problem is not limited to the states, but pervades the federal government as well. Despite recent calls for improved property management, there is still no centralized accounting of the federal government's real property. President Obama has commanded his administration to improve its property management activities, but without an inventory, the White House will not be able to fully pursue efficient government.

Both studies find that the technology required to assemble comprehensive inventories has long been readily available, and that most states already use the relevant tools for other purposes within government. Geographic Information Systems (GIS), which involve satellite imaging and detailed surveying, are employed by most states and many federal agencies to map out certain types of public property (e.g. national parks, nature preserves, mineral fields). Extending GIS efforts to encompass all government real property is not technically difficult.

Furthermore, there are tremendous fiscal incentives for governments to assemble a useful RPI. A comprehensive survey of publicly-owned property can identify underused and unused land and assets, allowing for improvement or divestment. The windfall profits from divesting unneeded property are great, and the efficiency gains from eliminating redundant and wasteful property are greater still. In this way, existing state RPI efforts have quickly paid for themselves. The federal government is projecting trillion-dollar deficits for the next decade, and state governments are facing massive budget crises; productive property management made possible by RPI can help reduce these problems.

Ultimately, technical and financial obstacles do not prevent creation of real property inventories. Instead, governments are kept ignorant of their own property by weak political willpower and poor execution. There is a tendency in government to ignore real property management issues because they are not exciting or emotional. Politicians who care more about flashy headlines than responsible governance avoid the issue of RPI altogether. Even in the event that an RPI initiative is actually undertaken, the process is often ill-conceived and incomplete, and the resulting inventories are not productive for government.

With this in mind, we make 12 recommendations to help state and local governments develop effective inventory systems that can save taxpayers money.

Centralize and streamline the management of all state or local property.

Standardize reporting methods for all government agencies and divisions.

Put the inventory online for public access.

Use the inventory to make informed decisions and manage the properties.

Keep the inventory up to date online.

Divest unneeded land and assets to save taxpayer money.

Utilize the wide range of private sector expertise available to manage the assets.

Align the assets and inventory with defined policy goals.

Look for efficiency gains.

A proper RPI can allow states and federal agencies to economize their activities, saving taxpayers money and eliminating waste. The necessary technology exists, and the financial benefits are substantial. Public officials cannot claim to be responsible public servants if they refuse to take these simple steps toward good governance.